9911796707
TMI Blog1974 (7) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... it cannot be included in the total income. The Appellate Assistant Commissioner allowed the petitioner's appeal on February 26, 1952. Thereafter, the income-tax department went on appeal before the Appellate Tribunal and the Tribunal decided the issue against the assessee and in favour of the revenue on January 9, 1953. The petitioner took the matter on reference to this court and this court in R.C. No. 8 of 1954 reversed the finding of the Tribunal, on September 5, 1958, agreeing with the view of the Appellate Assistant Commissioner holding that the income which had accrued in Mysore cannot be brought to charge. The revenue pursued the matter further before the Supreme Court which reframed the question referred and directed this court on November 25, 1963 (Commissioner of Income-tax v. C. G. Krishnaswami Naidu), to decide the issue finally. This court finally decided in favour of the assessee setting at rest once for all the controversy as to the assessability of the income that accrued in Mysore State, on September 6, 1965. Thereafter, the Tribunal passed the consequential order under section 66(5) of the Indian Income-tax Act, 1922, hereinafter referred to as the old Act, on Oc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection is said to have been made on March 18, 1958. The first contention of the petitioner is that the tax having been collected by the revenue from him when it was not lawfully due, he is entitled to claim interest by way of compensation for the unauthorised retention of the money by the revenue and his loss of interest on the excess collection. But the learned counsel himself concedes that the petitioner's claim is not under the general law but based on the statutory provision in section 66(7). Even otherwise, we are clearly of the view that the petitioner cannot claim interest by way of compensation on the excess collection made by the revenue under the general law. The authorities have collected the amount under the authority of law and, therefore, there is no question of any claim for compensation in respect of the taxes collected in excess. It is fairly conceded by the learned counsel for the petitioner that but for section 66(7) the petitioner may not be able to claim interest on the excess tax collected and refunded later. We have to, therefore, consider the scope of section 66(7) with a view to find out whether the petitioner's claim for interest from the date of payment t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of the consequential order of the Tribunal as a result of this court's decision to reduce the period for which the petitioner has to be paid interest and also the rate of interest which should at least be the normal rate prevailing in the market, and that the grant of interest at 4 per cent. cannot at all be sustained. The scope of the power of the Commissioner under the proviso to section 66(7) came up for consideration before this court in Ajax, Products Ltd. v. Commissioner of Income-tax. In that case the assessee contended that the discretion give to the Commissioner under the proviso to section 66(7) is only as regards the rate of interest and not as regards the period for which the interest is payable and that interest is payable under the proviso from the date of overpayment and not from the date of the consequential order of the Tribunal passed under section 66(5). The revenue, on the other hand, contended that the discretion given to the Commissioner under the proviso extends not only to the rate of interest but also to the period for which the interest is payable, and relied on certain instructions issued by the Board on 26th May, 1967. After considering the scope o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the date of the original order of the Tribunal, that is, from September 5, 1958, to February 25, 1966, the date of refund at the rate of 4%. This is on the basis that section 66(7) could be invoked by the petitioner in this case. However, as already stated, the assessee has based his claim for interest only under section 66(7) of the old Act, and the Commissioner also proceeded on that basis. But in answer to the rule nisi the revenue has filed a counter-affidavit asserting that in view of the transitory provisions contained in section 297(2)(i) of the Income-tax Act of 1961, hereinafter referred to as the " new Act ", it is only the provisions of the new Act relating to the interest payable on refunds that have to be applied and not section 66(7) of the old Act. The learned counsel for the petitioner would contend that the revenue is not entitled to change its view and the Commissioner having applied section 66(7) of the old Act to the petitioner's claim for interest, it is not open to him now to turn round and say that the said section 66(7) has no application and it is only the provisions in the new Act that have to be applied. It is true that till the petitioner came to thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25, 1965, no interest is legally due to the petitioner. In support of that stand the revenue places reliance on the decision of this court in Pandian Insurance Co. Ltd. v. Commissioner of Income-tax. In that case, consequent on the decision of the Supreme Court in an assessee's case, he became entitled to a refund of a substantial amount which was paid within six months of the date of the order entitling him to get refund. Subsequently, the assessee claimed interest at 6 per cent. on the amount of refund from the date of payment to the date of refund under the proviso to section 66(7) of the old Act. This was, however, disallowed by the revenue on the ground that the petitioner was not entitled to claim interest on the refund as the refund has been granted within six months from the order entitling him to get refund and no interest is due in such case under section 243 of the new Act. The assessee came to this court contending that it is only section 66(7) of the old Act that could be applied in his case as the reference to the High Court and the appeal to the Supreme Court were all under the provisions of the old Act and that the provisions of sections 243 and 244 of the new A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the expression " proceedings for the assessment " meant original proceedings for the assessment and not appellate or revisional proceedings. In that case the expression " proceedings for the assessment " has been taken to comprehend the proceedings by way of appeal, revision or reference having regard to the context in which it has been used and the object with which the provision has been enacted. This decision cannot be taken to lay down a general proposition that wherever the word " assessment " occurs, it should naturally comprehend appeal, revision or reference. It has been pointed out by the Supreme Court in A. N. Lakshman Shenoy v. Income-tax Officer at page 291 : " This brief resume of the relevant provisions of the Income-tax Act, clearly establishes that the word " assessment " has to be understood in each section with reference to the context in which it has been used. In some sections it has a comprehensive meaning and in some a somewhat restricted meaning, to be distinguished from a 'reassessment' or even a 'fresh assessment'. " It is not, therefore, possible to construe the word " assessment " in the same sense wherever it occurs as the word " assessment " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med to have been disposed of by the High Court under the old Act as provided in section 297(2)(i) and, therefore, the order passed under section 66(7) granting interest was justified and that the provisions of the new Act cannot be applied. The court took the view that the assessment was not completed before the commencement of the new Act so as to attract section 297(2)(i) and its reasoning is this : " In the present case it is the contention of the opposite parties that the decision of the High Court dated August 21, 1962, has not yet been communicated to the Appellate Tribunal. Consequently, the Appellate Tribunal and the Income-tax Officer have not yet passed consequential orders. If that is the position, it is doubtful whether, the assessment can be said to be complete even now. It is by no means clear that the case is in fact governed by section 297(2)(i) of the new Act. " In the first of the two decisions the court did not consider the question as to whether the assessment had been completed before the commencement of the new Act, with reference to the applicability of section 297(2)(i) and in the second of the decision they have given a halting finding on that questio ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
